How To Sell Onions For $53 A Piece
By Tom Dyson
November 12, 2007

On June 2, 1851, the Flying Cloud broke the record for the fastest sea voyage between New York and San Francisco... 

Most ships would batten down the hatches and pray for their lives if a storm hit... especially in the violent seas around the Cape Horn in the middle of winter.

But the Flying Cloud loved storms and never slowed down. The strong winds pushed her faster. Often, when she arrived in port after a long journey at full speed, her sails would be hanging from the masts in tatters, and the masts would be splintered and cracking like chopped firewood.

They called the Flying Cloud an "extreme clipper ship." Clipper ships were the fastest wind-propelled cargo ships ever made. Unlike regular boats, clipper ships had very long and slender hulls. They had three masts. The Flying Cloud's top mast was 200 feet tall. They packed these masts with as much sail as they could. At full speed, the Flying Cloud's sails were as wide as football fields.

Clipper ships didn't have much cargo space, but they could really fly across the oceans. You could say the Flying Cloud was the 19th century's answer to FedEx.

The journey from New York to San Francisco is more than 16,000 miles. Before the invention of the clipper ship, it took more than 200 days to complete. The Flying Cloud did it in just 89 days. This record stood for 138 years... until 1989.

The California Gold Rush took off in the late 1840s. Thousand of prospectors poured into California looking for gold. There was plenty of gold in California... the problem was, there was a shortage of virtually every other necessity like tools, clothes, food, and lodging. In other words, a huge amount of money chased a shortage of goods. Inflation resulted...

I found these price statistics in the gold rush from Richard Maybury's excellent economics book for children "The Clipper Ship Strategy."

In today's prices, a pair of boots cost $1,500. A single onion cost $53. A pound of potatoes cost $80. A single slice of bread cost $53. A single slice of buttered bread cost $106. Shovels and picks were marked up 1,500% and for the price of one month's rent in a San Francisco hotel, you could buy a house on the East Coast.

Clipper ships delivered these goods from the factories and farms in the east to the desperate miners in the west. There was simply no other way to transport these goods to California. The clipper ships made huge profits by arbitraging price differences in the two markets. The faster they sailed, the more money they made.

I'm telling you about the clipper ships for a reason. You can make a lot of money in today's market using the exact same strategy. You won't have to take on the high seas for this one... only the currency markets.

In the last few weeks, the U.S. dollar's exchange rate buckled against every major world currency. The move happened so fast, most people don't even realize yet. For example, the Canadian dollar is now 10% stronger than the U.S. dollar. This is the first time in history this has happened. Or how about the pound sterling? You can exchange one pound for $2.09 today. The pound hasn't traded this high since the early 1980s. It's the same story with the euro and the Chinese yuan.

A British Invasion Is Coming Waiting for Your Banker with a Handgun

This means that American exports, houses, vacations, and investments look incredibly cheap to foreigners right now. To foreigners, America looks like a candy store.

If you want to get rich, I suggest you figure out how to sell American assets to foreigners.

My favorite idea is selling Florida property to Brits and French Canadians. These people love the sunshine, the beaches, and the theme parks. Florida property is in crisis, yet it's very expensive in Quebec and Britain. When you throw in the exchange rate differences, Florida property seems like the discount of a lifetime.

And nowadays, you can visit your profits via plane.

Good investing,

Tom